---
title: "P&G Reports FY2019 Revenue of $67.684 Billion, with Significant Contribution from China Market"
description: "On Tuesday, U.S. consumer goods giant Procter & Gamble released its FY2019 annual report, showing global revenue of $67.684 billion, a 1% increase year-over-year, marking the third consecutive fiscal year of growth. Notably, the China market contributed nearly one-third of the revenue growth, driven by strong sales of SK-II and Olay, despite a 60% drop in net profit due to a one-time impairment charge related to the Gillette business."
author: "New Distribution"
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published: "2019-08-02"
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# P&G Reports FY2019 Revenue of $67.684 Billion, with Significant Contribution from China Market

> On Tuesday, U.S. consumer goods giant Procter & Gamble released its FY2019 annual report, showing global revenue of $67.684 billion, a 1% increase year-over-year, marking the third consecutive fiscal year of growth. Notably, the China market contributed nearly one-third of the revenue growth, driven by strong sales of SK-II and Olay, despite a 60% drop in net profit due to a one-time impairment charge related to the Gillette business.

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On Tuesday, U.S. consumer goods giant Procter & Gamble (P&G) released its FY2019 annual report. The report showed that P&G's global revenue reached $67.684 billion during the period, a 1% increase from the same period last year. This marks the third consecutive fiscal year of revenue growth for P&G since FY2017.
Among the segments, the Baby, Feminine & Family Care division achieved sales of $17.806 billion; the Skin and Personal Care category saw organic sales growth of 15%; the Grooming division generated revenue of $6.199 billion; and the Beauty division achieved sales of $12.897 billion.
Notably, the China market contributed nearly one-third of P&G's revenue growth. This is attributed to P&G's decentralization of decision-making to the China market. It is understood that P&G China has proposed the "3D" principle: Design for China, Decide in China, and Deliver at China's speed.
Although P&G's revenue increased by 1% year-over-year, it failed to achieve profit growth. According to the report, net profit for FY2019 was $3.897 billion, a 60% decline year-over-year. The fourth quarter saw its first loss, amounting to $5.2 billion. P&G attributed the loss primarily to an accounting adjustment for the book value of the Gillette shaving business.
Gillette began cutting prices in 2017, hoping to prevent U.S. customers from switching to online startups such as Dollar Shave Club and Harry's, which sell low-cost razors and blades. This move had some effect, but for P&G, Gillette remains a "discordant factor" that runs counter to the parent company's operating strategy. In 2005, P&G acquired Gillette for $57 billion.
Gillette has previously admitted that it made a mistake by focusing too much on manufacturing increasingly high-end and expensive razors, thereby opening the door to lower-priced competitors.
Despite intensifying competition and fewer men shaving regularly, P&G stated that the business "remains a strategic business with attractive revenue, cash flow, and growth opportunities."
Additionally, P&G's revenue growth was mainly driven by strong sales of SK-II and Olay. However, due to the impact of Gillette, the Grooming division's net sales decreased by 3% to $1.6 billion (approximately RMB 11 billion). The division's net sales for the fiscal year fell 5% to $6.2 billion (approximately RMB 42.7 billion).
In fact, this is not the first decline for P&G. In FY2018, P&G's profit dropped from $15.4 billion (approximately RMB 106 billion) to $9.86 billion (approximately RMB 67.8 billion), and this year's profit was cut in half.
Founded in 1837, P&G once created an era of continuously launching brands it built, most of which became stars that attracted countless loyal fans. After entering China, P&G created a myth in the Chinese market, from advertising to products, receiving recognition from both the market and consumers.
However, in recent years, P&G seems to have faced some growth challenges. In FY2017, P&G's sales were $65.1 billion. In the second quarter of FY2018, P&G's net profit plummeted by 68.3%. P&G's predicament is similar to that faced by many Chinese physical retail giants such as Master Kong, Uni-President, Wahaha, and Belle: roughly stagnant performance growth and significant profit declines.
Nelson Peltz, chairman of Wendy's, the second-largest fast-food chain in the U.S., nearly joined P&G's board in 2017. He once wrote a 94-page "white paper" to impeach P&G's leadership. In the white paper, he analyzed the reasons for P&G's market share decline in recent years. He believed that as consumer demands become more segmented, consumers prefer brands that are closer to them; with the rise of young consumer groups, brand loyalty is decreasing, and consumers relatively prefer brands with personality that resonate with them. He also stated that with the development of e-commerce and the internet, for FMCG, the shelves that were once the most important display platform in front of consumers are no longer.
P&G once said: "You have the best product in the world, with the best advertising support, but if consumers cannot buy them at the point of sale, you cannot complete the sale."
Clearly, P&G's words still hold true today, but now consumers have too many channels to purchase products, from online to offline, from hypermarkets to convenience stores. This gives P&G more opportunities to showcase itself, but also brings more exposure to competitors.
P&G's most adept strategy is to conduct precise group positioning through consumer insights and analysis, then create good content creativity and brand stories to occupy users' minds, influence their purchase decisions, and lay out products through channel networks to harvest. It even once believed that awareness, reputation, and loyalty were the only path for brand promotion.
Today, we find that this law seems to have been reversed. Many brands start with loyalty, using niche products to meet the needs of a small group of people, then use the word-of-mouth of this small group to expand brand reputation, and finally form a well-known brand.
The market environment and consumer demands are constantly changing. Ultimately, the problems enterprises encounter are still that supply cannot meet the rapid growth and changes in demand.
What the financial report reveals is that P&G has super brands like Olay and SK-II that have successfully embraced social media, and their successful transformation has driven P&G forward. At the same time, P&G also has many brands like Gillette that are struggling with transformation and slowing growth.
Now, the era of simply selling goods is over. Crude methods such as advertising, promotions, and discounts have led many brands into a homogeneous red ocean. The era of simple brand indoctrination is gone forever. At this time, the user-oriented internal functions of enterprises are still lacking.
Mobile internet has truly connected millions of consumers. The emergence of community group buying and social e-commerce allows companies to obtain first-hand customer information in user communities or user groups, knowing who your customers are and what they really like. Be user-centric and create new value for them.
In today's digital era, P&G's own business methods and logic still retain the inertia of the past, unable to perceive dynamic consumption changes and failing to catch up with the new wave of consumption upgrades. How to make traditional brands embrace the internet and social marketing should be a question for P&G to consider.


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